Restrictive covenants in Irish employment contracts fail far more often than employers expect. Irish courts apply a strict reasonableness test, and a covenant that goes one step too far in geography, duration, or scope will be struck down entirely — leaving the business with no protection at all. Here are the five mistakes that most commonly sink these clauses.
What Irish law actually requires
Irish contract law treats restrictive covenants as restraints of trade. The default position is that any restraint of trade is void unless the party relying on it can demonstrate two things: first, that there is a legitimate proprietary interest worth protecting, and second, that the restraint is reasonable as between the parties and not contrary to the public interest.
The legitimate interests recognised by Irish courts are narrow. They cover trade secrets and genuinely confidential information, and established customer or client relationships where the employee had personal influence. Generalised business know-how, exposure to company culture, or routine commercial information does not cross the threshold.
Mistake 1: Drafting for the UK, not for Ireland
Since Brexit took effect, Irish employment lawyers have flagged a persistent problem: contracts drafted by UK-headquartered firms that copy post-Brexit English law assumptions into Irish agreements. English courts have in recent years applied a somewhat more liberal approach to enforceability, influenced by the Supreme Court's decision in Tillman v Egon Zehnder Ltd [2019] and subsequent case law. Irish courts have not followed that path.
Ireland's approach remains rooted in the pre-Brexit common law reasonableness test as applied domestically. The courts have not adopted the English doctrine of severance on the same terms. In Ireland, blue-pencilling — striking out an offending portion while keeping the rest — is applied cautiously and only where the offending words can be removed without altering the character of what remains. An Irish court will not rewrite a covenant to make it enforceable; that rewriting task belongs to the drafter.
Multinational employers frequently present employees with standard group agreements. If those agreements were designed around English court expectations, they carry real risk of being unenforceable in any Irish dispute.
Mistake 2: No geographic limit, or a limit that does not match the role
A non-compete clause that purports to prevent an employee from working "anywhere in Ireland," or worse, "anywhere in the European Union," will almost certainly fail unless the employee's actual role covered that territory. Irish courts ask whether the geographic scope matches the legitimate interest being protected — not what the employer would ideally prefer.
For most sales executives, account managers, or technical staff working in a regional or national role, a nationwide restriction is unlikely to survive scrutiny. For a senior executive with genuine pan-European client relationships, a broader restriction might hold — but it must be justified by evidence of what the employee actually did and whom the employee actually knew.
The judgment in Murgitroyd & Company Ltd v Purdy [2005] IEHC 159 is an Irish High Court decision in which Clarke J. held that the test is whether the nature and extent of a restriction is reasonable to protect the employer's goodwill, with geographic scope assessed against the reality of the employee's working territory. Irish courts take an empirical approach: the clause is tested against facts, not aspirations.
Mistake 3: Duration that ignores how quickly the information becomes stale
Twelve months is frequently treated as a rough upper limit in Irish case law for non-solicitation of clients and non-dealing clauses. Non-compete clauses — which are more extensive, preventing all work in a sector — face even heavier scrutiny. A two-year non-compete is not automatically unenforceable, but the employer must show that two years is actually needed for the protectable interest to expire.
In fast-moving sectors — technology, financial services, pharmaceuticals — client lists and product knowledge can become commercially irrelevant within six months. An employer arguing for eighteen months in those sectors faces the burden of explaining why the interest survives that long. Courts will look at the employee's seniority, the nature of the confidential information, and the rate of change in the relevant industry.
Employers who simply copy a duration from a previous contract, or adopt whatever their UK parent uses, rarely survive this analysis.
Mistake 4: Cascading or catch-all drafting
A covenant that prohibits an employee from being "engaged, concerned, or interested in any capacity in any business that competes with or might compete with the employer" is almost certainly too broad. The phrase "might compete" is speculative. "In any capacity" would catch a shareholder with a 0.1% stake in a publicly listed rival. Irish courts will not read down vague language charitably; they read it as written and find it disproportionate.
Cascading clauses — where the contract lists multiple alternative restrictions of decreasing scope and asks the court to apply whichever is enforceable — have had a mixed reception. Structuring a contract to invite the court to do the employer's drafting work for them is not good practice and creates its own uncertainty. A well-drafted single covenant with a clearly defined scope is more defensible than a cascade of uncertain ones.
Non-solicitation clauses fare better than non-compete clauses generally, but they still require proper definition. "Clients" should mean clients the employee actually dealt with, not every client on the employer's books. A clause covering all clients of the business, regardless of whether the employee had any contact with them, is likely to be rejected.
Mistake 5: No adequate consideration, or consideration added as an afterthought
A restrictive covenant introduced after employment has already started requires fresh consideration to be enforceable. Continued employment alone is generally not treated as adequate consideration in Ireland. The employer must provide something real: a pay rise, a promotion, a signing bonus, access to a share scheme, or some other identifiable benefit given in exchange for the covenant.
Employers who circulate updated contracts with new restrictive clauses and require existing employees to sign without offering anything additional are in a weak position if those employees later leave and the clause is challenged. The practical fix is to ensure that any covenant introduced mid-employment is attached to a clear and documented benefit.
For new hires, the analysis is simpler: the job offer itself is the consideration. But the covenant must appear in the written contract before the employee starts — not sent as a follow-up document after the start date.
Drafting that holds up
The pattern in successful Irish enforcement actions is consistent. The covenant is specific to the role, tied to named or defined clients, limited to a territory the employee actually covered, and set for a duration that can be justified by the shelf-life of the protected information. The employer can explain — in evidence — why each element is necessary.
A non-compete agreement for Ireland needs to be built around those specifics from the outset. Generic templates imported from other jurisdictions, or standard group agreements drafted without Irish law in mind, rarely meet that standard.
The Terms of Employment (Information) Act 1994, as amended by the Employment (Miscellaneous Provisions) Act 2018, requires certain written particulars to be provided to employees within defined timeframes. While restrictive covenants are not listed particulars, they sit within the contract of employment and must be provided in writing to be enforceable. Verbal post-employment restrictions have no practical force.
What happens when a covenant is unenforceable
If a court finds a covenant unenforceable, the employer cannot fall back on a narrower version of it. The covenant fails as a whole. The employer's remaining options are the implied duty of confidentiality — which covers trade secrets but little else — and any express confidentiality obligations in the contract, which are treated separately.
This is why the drafting stakes are high. A poorly drafted non-compete clause does not give the employer partial protection; it gives none. The effort invested in getting the scope and duration right at contract stage is far cheaper than the litigation cost of finding out the clause does not hold.
Irish employers with staff in sensitive roles should treat their restrictive covenant clauses as a legal asset worth maintaining, not a boilerplate addition. Courts assess them on the facts as of the date of enforcement — so a clause drafted for a junior employee five years ago may not protect the same person in a director role today.
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This article is general information, not legal advice — see our accuracy & editorial policy. Confirm the cited law is current before relying on it.